UK unemployment in surprise rise but wages rise 3.2%

Surprise: The unemployment rate was 5.6% in the three months to May (Picture: Philip Toscano, PA) Philip Toscano, PA

The number of people out of work has risen for the first time in two years, according to the latest figures, but a rise in wages helped soften the blow.

The Office for National Statistics said the unemployment rate for March to May was 5.6%, lower than the 6.5% recorded in the same period a year earlier, but a slight increase on the 5.5% seen in the three months to April

Meanwhile, the number of people in work fell by 67,000 as fewer took up part-time roles.

In contrast, wages including bonuses were up 3.2% in three months to May. Excluding bonuses, the growth was 2.8% - the largest in more than six years.

Ian Stewart, chief economist at Deloitte, said the "underlying story is good for UK consumers".

"The labour market recovery is shifting, with the pace of job creation cooling and earnings heading up.... Private sector jobs and full time work are expanding.

"The frenetic pace of job growth has slowed, but the good news is that wages and productivity should pick up from here."

But the British Chambers of Commerce said the "disappointing" job figures highlighted a need for more action to spur Britain's recovery, though there was no cause for alarm.

"This setback is a reminder that our recovery is still fragile and that further measures are needed to nurture economic growth, in particular by encouraging businesses to invest and export," said David Kern, the BCC's chief economist.